Senate Republicans recently came out with their own healthcare bill, which is basically Obamacare by another name. The bill keeps penalties for not having insurance, and preserves several price-increasing regulations. The details of the Senate’s plan have been talked about elsewhere.
However, to understand the flaws with both the House and Senate healthcare plans, perhaps we should go back to basics.
How Insurance Works
Insurance is a bet against yourself. When you pay money to the insurance company, whether it be for your car, healthcare, or whatever else, you agree to pay the company a certain amount now in exchange for them covering the bill in the case of an emergency.
What would happen to your car insurance rate if you drove into a telephone pole? What would happen if you add car washes to your car insurance policy? The price would go up, and anybody who has ever looked at a supply and demand graph or knows how insurance works would agree.
Why are car washes not on your car insurance policy? Because insurance and caring for your car are not the same thing. Car washes are not emergencies, and that is why they are not part of your car insurance plan.
This is also the reason why all drivers are required to have car insurance before they hit the road. Insurance is not a get-out-of-jail-free card, but a contractual service. Getting into a wreck and asking the insurance company to pay for it only makes sense if you already have insurance first.
Wanting What You Can’t Have
However, when it comes to health policy, we cannot shake the idea that healthcare and health insurance are the same. The most common example of this is coverage for preexisting conditions.
Wanting to receive insurance for something you refused to insure beforehand is a contradiction of terms. It also makes no economic sense for the insurance company, because for them it would be a guaranteed loss.
This is why car insurance costs more for those with bad driving records than those with clean records. Simply put, your past driving record strongly indicates what your future conduct might be. The company is assuming more risk to cover you, and this directly affects your rate. In other words, insurance costs more for some drivers than others because of “science.”
The same is true for your health insurance. Those at a higher risk of having health problems will have a higher premium. Further, those with known problems are a known risk for the company. Again, insurance policies costs more for some people than others because of “science.” (If we have learned anything from our liberal friends, it is that invoking science automatically wins an argument.)
Still, proponents of government healthcare say we must cover all of these very important things. Companies must be forced to cover preexisting conditions. Men, especially single men, must be required to purchase maternity coverage–a service they will never need. To not mandate these things would be unfair, cruel, and inhumane.
Here lies the problem with the current debate. Everyone wants lower premiums, but they also want these feel-good regulations. The laws of economics say that you cannot have both.
Confusing Healthcare with Health Insurance
Politics is a business that requires you to listen to what people want. In health insurance policy, many want to have their cake and eat it too.
This country, therefore, faces a decision that it must stop lying to itself about. We can have these feel-good regulations, such as the preexisting conditions mandate, but continue to have ridiculously high premiums. Or, we can recognize that the road to hell is paved with good intentions and opt for marked-oriented solutions.
If Republicans continue down this middle road of Obamacare-lite, a single payer system is not too far away. In that system, you give the state power over life and death.